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Japan-Update

Hisamitsu's 9-month operating profit likely down 11%

No cure for generic competition and swelling research costs

Hisamitsu's over-the-counter pain-relieving patches.

TOKYO -- Hisamitsu Pharmaceutical's consolidated operating profit likely sank 11% on the year to some 20 billion yen ($177 million) for the March-November period amid competition from generic drugs and rising research costs.

Sales are seen down 9% at about 100 billion yen.

Mohrus pain-relieving tape, which generates more than 30% of group sales, sold fewer units as generic brands gained popularity. Its sales likely dropped around 10% even though a prescription limit on such products is no longer depressing sales compared with a year earlier.

American unit Noven Pharmaceuticals, a producer of menopause drugs and another treatment, also struggled.

Earnings were weighed down by research costs for such new products as the HP-3070 schizophrenia drug, which is in final-phase U.S. clinical trials. Most schizophrenia medications are ingested orally, but this will be the world's first transdermal version. It is seen significantly contributing to earnings if it can be commercialized. Hisamitsu plans to apply for approval next fiscal year.

A bright spot has been Salonpas, a line of over-the-counter pain relievers popular with Chinese visitors to Japan. Purchases also rose among young consumers, a demographic the company finds difficult to crack, thanks to celebrity commercials. More active ingredient and advanced adhesives also contributed to brisk results in the U.S. Sales for the series likely climbed more than 10% on the year.

For the full year through this coming February, Hisamitsu will likely maintain its forecast when announcing official nine-month results Jan. 12. It sees sales growing 1% to 147 billion yen and operating profit falling 8% to 24.1 billion yen because of heavy advertising and research expenses. Salonpas sales will likely underpin earnings by rising 22%.

(Nikkei)

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